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NTIA and RUS
Broadband Technology Opportunities Program
U.S. Department of Commerce
Room 4812
1401 Constitution Avenue, NW
Washington, DC 20230
Re: Comments on Section 6001 of the American Recovery and Reinvestment Act of 2009:
Docket No. 090309298-9299-01 – NTIA and RUS Joint Request for Information - Dated March
12, 2009
Dear NTIA and RUS:
Lehigh Valley Cop Telephone Association hereby submits its comments on Section 6001 of the
American Recovery and Reinvestment Act of 2009 (ARRA) regarding several of the specific
agency questions for both NTIA and RUS. We thank both the NTIA and RUS for providing the
opportunity to submit these comments in an effort to assist in the preparation of the guidelines
and rules.
We are a rural telephone LEC in Iowa. Our company has been in business since 1949. We have
demonstrated a commitment to improving access to broadband services in the rural
communities within our service area.
Both, the NTIA and RUS have been given a great honor by being designated as the authorities to
oversee the distribution of $7.2 Billion in Stimulus Funds under the ARRA. This authority brings
the difficult role of determining the most effective and efficient way of awarding and
distributing the funds allocated by them. In the process of establishing the rules and guidelines
to be used in the application process, both are seeking public comments on several aspects of
the bill. As a rural carrier, we are among the entities that could effectively utilize funds from the
stimulus bill to improve the broadband service in our rural communities. We appreciate the
time constraints and daunting process that NTIA and RUS will be undertaking when reviewing all
the public comments and then determining funding eligibility.
On behalf of the rural communities we serve, we respectfully submit these comments, as a
separate attachment, in which we address the items NTIA and RUS outlined in its Joint Request
for Information published in the Federal Register, Docket No. 090309298-9299-01, on March
12, 2009.
Respectfully submitted,
James E Suchan
General Manager
Via Electronic E-mail to BTOP@ntia.doc.gov
Lehigh Valley Coop Telephone Association Comments on Section 6001 of the American
Recovery and Reinvestment Act of 2009: Docket No. 090309298-9299-01 – NTIA and RUS Joint
Request for Information - Dated March 12, 2009
NTIA Program Comments
1. Purposes of the Grant Program
In response to whether a certain percentage of grant funds should be allocated to each
category proportionately, we strongly believe that the funds should be allocated to
those categories that have the greatest need. The ARRA was enacted to create jobs,
close the broadband gap, stimulate the economy, improve current and future
broadband services and encourage the demand for broadband. Projects that will be
able to meet those requirements and provide broadband access to those areas that
meet the definitions for both unserved and underserved should be allocated the
greatest share of the funds. The most important need is for these areas to get
infrastructure in place that will allow service providers to offer broadband to the
greatest population over the greatest serving area. Educating users on broadband
services and adoption will be a part of the marketing effort of individual service
providers. Community focused providers will ensure that their customers are educated
on the uses and benefits of broadband access. Using the funds to construct broadband
infrastructure should be the highest priority. Once the infrastructure is built, broadband
access will be extended to all of the institutions listed in the bill, (schools, libraries,
medical and healthcare providers, community colleges, etc.) in each community.
2. Role of the States
It will be important for the NTIA to coordinate its work with the States with respect to
the BTOP. However, the level of involvement by the States will need to remain strictly
advisory. The ARRA states that the Secretary may consult a State with respect to:
identification of areas described in sub-section (b)(1) or (2); and, the allocation of grant
funds within the State for projects. There have been several comments, both during
and after the Open Forum meetings, regarding what level of involvement that the States
should possess. Unfortunately, there are many differences in opinion. Coordination
between NTIA and the States will be important in determining areas where there is a
need for broadband service. However, NTIA will need to maintain final control and
independent decision making on awarding funding throughout the grant award process.
If States were given the authority to determine which projects would qualify by means
of “screening” the applications before NTIA’s review, there could be a potential conflict
of interest, primarily due to the fact that some States will be submitting projects of their
own. This conflict may prejudice projects submitted by private entities like us. States
should be able to provide insight on projects that will provide broadband service to the
greatest population. However, as a means of maintaining consistency in how grants are
awarded in all 50 states, NTIA should be the final decision maker in determining funding
for all applications. The State’s role should remain merely advisory in nature by
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coordinating and gathering projects as established in the ARRA.
3. Eligible Grant Recipients
Eligible grant recipients should be those listed under Section 6001(e)(1)(A) and (B) of the
ARRA. Further, under (C) other entities should include rural LECs and CMRS, like Lehigh
Valley Coop Telephone Association . Grants need to be awarded to those entities that
are community focused and have a history of ensuring that quality service is provided.
By eliminating the large RBOCs, CMRS, start up entrepreneurs, investment firms,
speculators and others who either lack a rural focus or have no service history, you will
be ensuring that those who will be benefitting from the broadband stimulus funds will
have a commitment to the rural communities, that they will get the job done timely and
efficiently and that quality broadband services will be provided long term. Community
focused rural providers prove daily their commitment to the communities they serve by
reinvesting back in the communities.
A key element of every eligible grant recipient will be that the project they are
submitting will increase both the affordability and overall take rate of broadband access
to the greatest population of users in the area. In addition, the project will need to
enhance the current broadband access service to the following institutions: health care,
educational facilities, public safety, libraries and community centers.
4. Establishing Selection Criteria
There should be established selection criteria to award any funds and that criteria must
be made public before any deadlines are set for submitting applications. We would
suggest NTIA look back to the original TOPS program and how applications for that
program were reviewed with modifications required by the priorities now stated in the
ARRA at Sec 6001. In the TOP program, the following criteria were analyzed and
weighted in determining award recipients:
• Project Purpose (20%)
• Innovation (30%)
• Community Involvement (10%)
• Evaluation (10%)
• Project Feasibility (20%)
• Project Budget (10%)
For the new BTOPs program, a similar process could be used with several criteria from
the ARRA that could be rated and assigned a relative weight as follows:
• Project to provide infrastructure capable of providing broadband service to the
greatest number of population in unserved and underserved areas (30%)
• Provide service to Community Anchor Institutions (20%)
• Applicant’s level of experience and commitment to the community (20%)
• Project’s economic feasibility (10%)
• Long Term Sustainability of Broadband Access (10%)
• Ability to timely start and complete the project (10%)
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In weighting the criteria for the BTOP Grant selection process, NTIA should review the
area of the proposed project by looking at the level of broadband service currently
being offered and the economic need of the communities for broadband. The past
history of the applicant should also be reviewed including the following: level of
experience, service reliability, customer service and financial stability. Long term
feasibility of the project will need to be judged. All applicants should provide a financial
forecast showing at least a 10 year projection. The forecast will need to demonstrate
that the project is sustainable long term. The net income and cash flow in the forecast
need to prove this. NTIA should establish consistent minimum financial benchmarks to
show such long term sustainability.
NTIA will need to coordinate with RUS in establishing priorities in granting funds. Due to
the fact applicants may be applying to both authorities, coordination will need to be
maintained to avoid any prohibited double dipping in the awards process. Priority
should not be given to proposals that leverage other ARRA funding or that do not
provide at least a minimum of 20% equity. Applicants need some level of company or
local financial commitment to ensure that they are invested in making the project a
success long term. Any waivers of the 20% equity requirement, as allowed in the ARRA,
should be rare.
Also, NTIA should deny applications proposing a project that would overbuild the service
area of any existing RUS borrower, unless the applicant is a current or existing RUS
borrower serving that area. Funding should not be granted to create new competition in
areas that already have adequate broadband. Funding should only be provided to build
out broadband infrastructure in areas that fit NTIA’s definition of unserved or
underserved.
Priority should be given to applications that demonstrate the applicant has a history of
commitment to serving rural populations and has done so successfully for some time.
The application should require a detailed narrative on those who will be served,
including public anchor institutions, if funds are awarded, how the project will be
implemented and over what time frame the project should be implemented. Due to the
number of applications that are expected to be submitted, priority should be given to
applications that will be serving the greatest need by offering broadband access to the
greatest number of customers over a project area and at the highest speeds possible.
Also, the project should score higher if it provides key services to core community
anchor institutions, such as, the public safety network, Tribal lands, educational
facilities, libraries, and medical and healthcare facilities.
The evaluation of sustainable adoption of broadband service need not be subjective.
Sustainability can be demonstrated by an applicant's past track record in delivering solid
broadband penetrations in other areas it serves. Further, NTIA can review past
marketing and pricing of services to ensure that a reasonable and affordable price can
be maintained for any NTIA project. The rules should not require a mandatory
marketing study, but if an applicant voluntarily provides one as a part of its application
(a market survey which includes market penetrations that support long term
sustainability) then these applications should score higher in the NTIA selection process.
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A detailed quality project would likely do a scientific marketing survey to best determine
pricing, service goals, penetration and long term sustainability.
In response to the question on whether the fact that different technologies provide
different service characteristics should be considered given the “technologically neutral
fashion” direction of the ARRA, we agree that the selection criteria needs to be
technology neutral. Different broadband technologies will differ based on the needs of
a community, the terrain of a service area, the availability of spectrum, ROW, poles, etc.
Therefore, NTIA should allow applicant’s to decide what technology to utilize, wireline
or wireless, to provide broadband access dependent on the terrain of the area and
other service area characteristics. Applicants will want to use technology that will be
able to offer the greatest speed to the greatest population in the area(s) they desire to
serve, also considering the long term economics of their choice.
5. Grant Mechanics
In discussing the mechanisms that should be used in distributing funds, we suggest that
the NTIA and RUS use a simplified and coordinated application and review process,
similar to what NTIA has used in the past like TOPs. In reviewing applications, there
should be a proper review process which focuses on the quality of the application and
the project being proposed. The funding and selection of quality projects that fit the
final criteria is more important than taking an “out the door quickly” approach. Please
see our comments in #4 above regarding selection criteria and review processes. It will
be critical that both NTIA and RUS establish similar standards in how applications will be
reviewed. A similar application and process would be best having differences only
where the text of the ARRA require differences. It will also be critical that both are well
staffed in order to meet the demands of the application process.
6. Public Computer Center Capacity
As a part of the ARRA, not less than $200 million is to be awarded to expand public
computer center capacity. In awarding the Public Computer Center Capacity funds, a
request for funds with a detailed plan on how the funds will be used should be included
in the application. Often this request should be in connection with a request for funds
to build the broadband infrastructure in the same community also. Public Computer
Centers can be very valuable for rural communities. For example, job training,
education, research, marketing, economic development, keeping in touch with friends
and family or in touch with world events are just a few potential uses of a Public
Computer Center. A Public Computer Center can be set up as a separate location,
within a public library, community hall, school, senior center, nursing home or assisted
living center, within a Community College, tribal facility, and local medical or healthcare
facilities. The key in establishing or enhancing a Public Computer Center is to provide
access to computers and broadband, while educating and training residential users and
community organizations on the uses and benefits of broadband access. Such centers
prime the pump for further adoption in the community.
7. Innovative Programs to Encourage Sustainable Adoption of Broadband Services
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As a part of the ARRA, not less than $250 million is to be allocated to “Encourage
Sustainable Adoption of Broadband Service”. Service providers will be promoting and
advertising the benefits of their services which history shows leads to reasonable levels
of broadband adoption over time where good service is being provided. It will be
important to have the Public Computer Center in place to ensure, access, education and
training is occurring in the communities that receive stimulus funds. Without, access,
education and training, consumers may not utilize broadband services to their full
potential simply because they do not have the access or knowledge.
8. Broadband Mapping
NTIA will need to coordinate with each State during the process of establishing a
nationwide inventory map of existing broadband service capacity in each state in the
United States. The FCC recently updated the rules on filing the FCC Form 477, which
contains much of the key data that can be utilized in developing a comprehensive
nationwide broadband map. We encourage NTIA to work with the FCC, RUS and state
agencies to share this data as permitted by law. The FCC Form 477 does include
significant proprietary data, which will need to be protected while being utilized in the
mapping process. With the recent revisions to the FCC Form 477 filing rules, the FCC is
requiring the Form 477 be completed by Census Tract, to list providers, technologies
utilized, subscriber counts and established speeds. If NTIA uses the information
provided on the Form 477, a clear view of served, unserved and underserved areas will
be shown on the state and nationwide broadband maps. NTIA has the duty to establish
the nationwide inventory map, but will need to work with each state to coordinate that
all mapping is combined into one nationwide map as required by the Broadband Data
Improvement Act.
We disagree with the prepared Testimony of Connected Nation Chairman and CEO Brian
Mefford regarding broadband mapping being prepared at a household level. The
concept of working with state agencies to develop a map at the household level,
especially in rural areas would be a daunting task to undertake and is not necessary with
the data providers already prepare for the FCC 477 form. We should use that data and
not require any new or additional inconsistent efforts in each of the 50 states. The
percentage of error between using Census Tract and Household level does not appear to
be as significant as thought by Connected Nation and does not warrant using a process
other than the reporting required by the 477 forms.
9. Financial Contributions by Grant Applicants
The limit set on funding requests should normally not exceed 80% of the total grant.
Applicants that are able to contribute at least 20% of their own funds, whether in cash
or other in kind equity (hard assets, spectrum, etc), will be more committed to the long
term viability of their projects. On the reverse side, if an applicant is dependent on
more than 80% in grant funds, their commitment to the, project, area and the people
will be less since they will have little investment into the area and the project.
Applicants who are willing and financially able to commit a greater percentage of their
own funds in to a project should score higher in the review process when awarding
funds. NTIA should waive the 20% equity requirement only in very rare cases of
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extreme need. Frequent waivers would reduce the dollars available for other well
deserving projects also.
In determining whether or not a project would have been implemented without Federal
assistance, the history and demographics of the proposed coverage area for the project
will need to be reviewed. In addition, projects that are being submitted should be
analyzed for financial need. Project selection should be based in part on the need for
grant funds to complete the project. Without grant funds, the cost justification would
not have otherwise been financially feasible.
10. Timely Completion of Proposals
We propose that NTIA and RUS establish a realistic timeline in which applications will be
reviewed and funds awarded. Awards should be made to projects where the
application documents that they are high quality and prove that they are sustainable,
which should be more important than a quick turn-around in awarding funds. NTIA will
need sufficient time to review the applications and projects. In addition, if an
application template is developed, time consideration may be needed for OMB review
and approval.
We encourage NTIA and RUS to look at historical application practices in both the
original TOPs program and Broadband Loan programs. If there were mistakes made or
the processes were to slow when awarding funds those issues need to be rectified and
the process simplified. However, many rural LECs are familiar with those application
processes and could quickly adapt to any minor ARRA changes needed to make them
work. We applaud both NTIA and RUS for working together and continuing to improve
and enhance their processes so that sound decisions will be made in the Stimulus
funding process.
In response to ensuring that projects can be completed within two years, we
recommend that applications include a detailed timetable for the project in which
requests for funds are being made. Once funds are awarded, as a part of the quarterly
reporting requirements, award recipients should include an updated timetable marking
the progress that has been achieved in addition to steps still needing to be met. NTIA
and RUS should allow some flexibility in the timeline, depending on the type of
technology being proposed in the project and product availability. For example, a
wireless project that is proposing a LTE deployment will be dependent on when product
development is completed, which is estimated towards the tail end of the two year time
frame.
11. Reporting and Deobligation
The quarterly reports (which should include updated timetables showing what has been
completed and what is still needed) will be the main source for NTIA and RUS review to
determine whether funds are properly being spent. NTIA and RUS staff members that
will be responsible for overseeing the projects that are awarded funds will need to
compare the progress of projects to the commitments made in the applications. In the
event it is determined that funds have not been used in accordance with the ARRA,
Lehigh Valley Coop Telephone Association Page 7 of 10
rules, or an application, any remaining funds should be frozen until a review can be
completed to determine the impact the deobligation of the funds would have on the
part of the project that may have already been completed. All funding should be
deposited in a separate funding account until the funds have been spent and the project
is completed for better review.
12. Coordination with USDA’s Broadband Grant Application
To efficiently and effectively review the volume of applications that will be submitted to
both NTIA and RUS, it will be important that each authority have application formats
that are similar. Applicants will have the opportunity to submit applications for both
programs. As such, they will need to maintain an open forum for communication and
coordination in the review process with each other. Both programs should adopt similar
definitions, especially of rural, unserved and underserved. Joint funding by both NTIA
and RUS may be appropriate in a larger mixed project where NTIA is lead on community
services, including public anchor institutions, while RUS would focus on rural
infrastructure funding.
13. Definitions
There are several terms in the ARRA that require NTIA to define them. It is important
that these terms be clearly defined to allow applicants to identify whether their
proposed projects will meet the requirements. Terms requiring definitions are as
follows and we provide our suggestions herein:
a) Unserved: To be classified as an “unserved area”, applicants need to show that
the area they are proposing to serve is currently only able to receive broadband
service at a speed of less than 768Kbps, bi-directional, during peak – hour load.
b) Underserved: To be classified as an “underserved area”, applicants need to
show that the area they are proposing to serve is currently only able to receive
broadband service at a speed of 768Kbps to less than 12Mbps, bi-directional,
during peak – hour load.
The speeds as defined above in a) and b) are consistent with the FCC’s new
broadband speed reporting requirements for FCC Form 477. In addition these
speeds are also supported by OPASTCO and other national organizations.
c) Broadband Service: Broadband service should be defined consistent with the
speed tier system as currently established by the FCC. Following this system,
the minimum bandwidth for basic broadband should be 768Kbps downstream.
d) Nondiscrimination and Network Interconnection obligations: In proposing
suggested definitions regarding nondiscrimination and network interconnection
obligations, we recommend that NTIA and RUS adopt the FCC’s Policy
Statement adopted August 5, 2005. Applicant’s must also comply with, Section
Lehigh Valley Coop Telephone Association Page 8 of 10
230 (b) of the Communications Act of 1934, Congress states that the United
States policy should be to “preserve the vibrant and competitive free market
that presently exists for the Internet” 1
e) Community Anchor Institutions: NTIA should define what will be classified as
a Community Anchor Institutions in order to be consistent and provide guidance
for applicants as they prepare their applications for funds. We interpret
Community Anchor Institutions to be those institutions that are vital to the
ongoing functioning and longevity of a community. For example: public safety
institutions like police, fire, emergency response; city hall; schools; hospitals or
medical clinics; Chamber of Commerce; library, etc.
RUS Program Comments
1. Most Effective ways RUS could offer Broadband funds
To be effective, RUS will need to take an approach similar to NTIA in the application
review process. The application process will need to be streamlined significantly
compared to the current RUS loan programs in order to meet the timeframes
established in the bill and desires of the President and Congress. We would recommend
that the funds that are allocated to RUS be divided between grant and loan funds with a
higher percentage going to grants Such as, 60% grant and 40% loan funds. Projects
seeking funds from NTIA are going to be those projects that may not be financially
feasible with the traditional RUS loan program or the existing RUS Broadband loan
program.
2. How can RUS and NTIA best align their activities to make the most efficient and
effective use of the funds
RUS and NTIA will need to have similar processes for application submission, review,
scoring and awarding of funds. The definitions as proposed for unserved and
underserved under NTIA should be considered in determining if an area can be classified
as a “rural area without sufficient access to high speed broadband service” under the
RUS program. NTIA and RUS will need to maintain an open forum for communication
and coordination in the review process with each other. NTIA should deny applications
proposing a project that will overbuild the area of an existing RUS borrower, unless the
applicant is a current or existing RUS borrower serving the area.
3. Definitions
RUS is seeking comments on how to determine if an area lacks “sufficient high speed
broadband service to facilitate rural economic development”. In order to determine
this, a few terms require definitions.
a) Rural Economic Development: The ARRA was passed to create new jobs and
stimulate the economy. A proposed project should be able to show how many
1
47 U.S.C. § 230(b)(2)
Lehigh Valley Coop Telephone Association Page 9 of 10
new jobs will be created as a result, how it will stimulate the economy of the
area that will benefit from the project and that the project benefits will be able
to be sustained over several years.
b) High Speed Broadband Service: Speed limits should be the same as those
defined under the NTIA proposed definitions for unserved and underserved.
c) Rural: The definition per the Farm Bill Sec. 601 identifies rural as any area,
which is not located within: a city, town, or incorporated area that has a
population of greater than 20,000 inhabitants; and an urbanized area
contiguous to a city or town that has a population of greater than 50,000
inhabitants.
4. Priority criteria
There should be established selection criteria in awarding funds and the criteria must be
made public before any deadlines are set for submitting applications. There are several
criteria that could be used. However, we believe that current and former RUS
borrowers should be one of the top priorities in the selection criteria for entity eligibility
consistent with the language of the ARRA. In addition, RUS should also take into
consideration similar criteria and priorities as outlined in the NTIA comments on
Selection Criteria. Due to the fact RUS and NTIA should have similarities in the
application process; the selection criteria should also be similar. However, there are a
few unique RUS criteria, which are listed in the ARRA that also must be considered. They
are:
• Providing service to the highest proportion of rural residents that do not
have access to broadband
• Provide evidence that all elements will be fully funded
• Provide evidence that the project will be completed if funds are
provided
• Provide evidence that the project will commence promptly following
approval
• Providing a choice of more than one service provider
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